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Wednesday, 8 July 2015

Budget 2015 - The Chancellor takes with one hand and gives back with another

by Sunil Patel

The Chancellor George Osborne has pledged a 'national living wage' of up to £9 per hour by 2020, in the Conservative's first full budget in 18 years.This means the rebranded minimum wage would rise to £7.20 for over 25-year-olds by next year.Businesses will pay for the wage increase through a cut in corporation tax to 19 percent by 2017 and then to 18 percent over the five years.The Office of Budget Responsibility (OBR) claims this measure will result in 60,000 job losses, but a bullish George Osborne reveals this will be a pay rise of £5,000 for 2.5 million people over the next five years.In Mr Osborne's seventh budget speech, he declared Britain was open for business after revealing business investment was up by 31.9 percent since 2010.He also promised to raise the tax-free threshold for low wage earners from £10,800 to £11,000 from 2015/16.And for the top earners, their 40 percent taxable income threshold would rise from £42,385 to £43,000 over the same time period.Maintenance grants for poorer students would be scrapped and replaced by loans but chancellor predicted this would not lead to a drop in numbers attending university.He argued the rise in tuition fees from £3,000 a year to a maximum of £9,000 a year in 2012 had not deterred students from poorer families.Many Twitter followers tweeted their discontent on social media at latest proposals to hit students in the pocket.

#students getting hit again -maintaining a UK reliant on sourcing skilled staff overseas rather than creating home grown talent #budget2015

Some critics have suggested the Conservatives have also continually hacked away at the welfare bill in efforts to raise up to £35 billion over the next five years.Low-paid worker benefits were targeted despite describing the chancellor describing it as a budget for designed for working people.The £26,000 benefits cap which is the maximum which can be claimed by one household would be slashed by 12 per cent to £23,000 in London and by 23 per cent to £20,000 in the rest of the country.